Here is article by Judge Ruth Kraft, Chair of Kirschenbaum & Kirschenbaum's Employment and Labor Department,  You can reach Judge Kraft at (516) 747- 6700 x 329 and RKraft@KirschenbaumEsq.com.

    It’s that holiday season again and time for another article about potential consequences to employers when the holiday party generates a bit too much cheer and a little less good will to men and women!  Parties that start wonderfully and end with alcohol-induced unhappy-hour can put you, as the employer, with exposure if an inebriated employee harms himself or others or engages in harassing behavior.  You can be sued for the misdeeds of your intoxicated employee under various legal theories ranging from workers’ compensation to sexual harassment to negligence.      Although you may have certain legal shields in various states, that will not protect you against the costs of litigation.  Additionally, employers are enticing legal targets based on the “deep pocket” theory.  Let’s face it, no one wants to be in the position of defending an unpleasant case involving injuries or death---or dealing with the adverse publicity when your name is associated with an incident.  

One of the biggest problem areas for employers when alcohol is involved is the potential for liability to nonemployees.      Third parties injured by a company’s intoxicated employee will claim employer liability under the doctrine of respondeat superior which, in plain English, means that an employer may be liable for acts of the employee when committed within the scope of employment.  Thus, intoxication at a social function may not give rise to the same liability as when an employee becomes inebriated at a business dinner.  

Workers’ compensation laws address employer liability to its own workers or their survivors, covering all workplace injuries on a no-fault basis.  However, they may exclude injuries that occurred at employer sponsored recreational events where attendance is not required or that are the result of intoxication on the job.  New York and Indiana exclude those injuries from coverage under workers’ compensation---which means that you are more likely to be sued.

    Employers may also be sued for alcohol-related incident under state wrongful death laws under which the personal representative of a deceased may sue any party whose actions caused the death.  Fortunately, estates have had only minimal success using this doctrine. A larger concern is a negligence claim against the employer.  Such a claim typically arises in the context of an office party or function at which the employee becomes intoxicated, leaves the party and injures another person no the way home.  The legal theory behind this claim is that the employer owed a duty to the third party to exercise reasonable care and breached it causing harm.  Courts have used this theory when the employer or its agent continues to serve drinks to an obviously intoxicated employee.

    Undoubtedly, alcohol and sexual harassment may be intertwined when an inebriated employee makes inappropriate advances toward coworkers or others.  One federal appeals court noted that “office Christmas parties seem to be fertile ground for unwanted sexual overtures that lead to Title VII complaints.

    So, what to do?  The most conservative option is to ban alcohol in all business settings, including holiday parties.   Bah, humbug!  A more practical solution is to have a clear policy (yes, my favorite word!) requiring employees to exercise moderation and good judgment.  A business entertaining policy should include:

    1. A clear statement prohibiting the use of alcohol and certainly illegal drugs while working and containing, if desired, a limited exception for business social functions.  Consider a one or two drink rule.

    2. Emphasize that attendance at holiday parties is voluntary and that it is solely a social event.   Employees should not be paid for attendance.

    3. Be clear that intoxication or drug abuse at holiday parties will result in discipline.

    4. Remind workers that workplace rules, including my anti-harassment/anti-discrimination policy, apply to employer sponsored events.

    5. Include spouses and significant others.  Workers actually behave better in public when they are present.  Also, watch out for the vendors-inviting them may create a business purpose and greater exposure for you.  Consider a venue or type of party for them that does not include alcohol but emphasizes an activity, such as bowling, miniature golf, etc.

    6. Limit the availability of alcohol-offer it for a limited period early in the party and do not provide a cash bar over which you will have no control.  Serve wine rather than hard liquor.

    7. Serve substantial food that can offset the effects of alcohol.

    8. Hold events after hours in restaurants or locations not operated by the employer.

    9. Designate a monitor to insure that impaired employees do not drive themselves (or others) home.

     Time is short before the holidays.  If you would like to add a written business entertainment policy to your documentation, please contact Judge Ruth Kraft at (516) 747-6700 ext. 326 or RKraft@KirschenbaumEsq.com

 
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